West Bengal Assembly Election 2026: Ahead of the 2026 West Bengal assembly elections, Chief Minister Mamata Banerjee has presented a populist budget aimed at securing voter support. However, as the Trinamool Congress (TMC) government expands its welfare schemes, rising debt and fiscal pressures are raising serious questions about the state’s ability to fulfill these promises.
In a move seen as an electoral strategy, Chief Minister Mamata Banerjee announced an increase in monthly assistance under the Lakshmir Bhandar scheme, presenting it as a direct response to the BJP’s Ladli Behna scheme, which helped the party secure victories in Maharashtra, Madhya Pradesh, and Delhi. With women comprising nearly half of West Bengal’s electorate, they remain a key focus of the government’s welfare programs.
The budget also includes a 4 percent increase in dearness allowance (DA) for state government employees, the introduction of a Rs 1,500 monthly allowance for unemployed youth for five years, extension of social security benefits like Swasthya Sathi to gig workers, and an increase in the salaries of Anganwadi workers and helpers to Rs 10,500 per month from April 2026.
The interim budget projects a total expenditure of Rs 4.06 lakh crore for the 2026-27 financial year. Yet, behind these generous spending plans lies a deepening fiscal crisis.
West Bengal’s debt has crossed Rs 8 lakh crore and continues to grow. Outstanding liabilities increased from Rs 6.99 lakh crore in 2024-25 to Rs 7.62 lakh crore in 2025-26, and are projected to reach Rs 8.15 lakh crore in 2026-27.
According to the 16th Finance Commission report, the state’s debt-to-GSDP ratio stands at 38.3 percent, making it the second most indebted state in the country after Punjab (42.9 percent). Adding to the problem are the long-pending arrears accumulated between 2008 and 2019. The TMC government is planning to borrow another Rs 1 lakh crore to finance its expanded welfare schemes, even as the Supreme Court has directed the state to clear 25 percent of the total outstanding arrears, amounting to approximately Rs 10,400 crore, by March 31.
Revenue deficit pressure
The Vote-on-Account projects a revenue deficit of Rs 21,759 crore for 2026-27, lower than the R 39,727 crore in 2024-25 and Rs 41,164 crore in 2025-26. However, finance officials have warned that complying with the Supreme Court order could push the actual deficit closer to Rs 32,000 crore.
The recent 4 percent DA hike alone is expected to increase the state’s expenditure by approximately Rs 750 crore, even though the budget makes no provision for clearing the long-pending DA arrears.
Expensive welfare schemes
A significant portion of the budget is dedicated to flagship welfare schemes. Approximately Rs 40,000 crore has been allocated for the Lakshmir Bhandar scheme, under which women from eligible families receive an additional Rs 500 every month. Another Rs 40,000 crore has been set aside for the Banglar Bari housing scheme.
In the last 50 months, the state has already spent Rs 74,000 crore on Lakshmir Bhandar, benefiting approximately 2.2 crore women who receive Rs 1,000 every month, while SC and ST beneficiaries receive Rs 1,200. Under Banglar Bari, families are given Rs 1.2 lakh for pucca houses, with the government promising to build an additional 32 lakh houses on top of the one crore houses already constructed. More than Rs 10,000 crore has also been allocated for other welfare initiatives, including Rs 2,000 crore for the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) program.
Balancing politics and finance
With mounting debt, rising expenditures, and court-mandated payments, the sustainability of these welfare schemes remains uncertain. Whether the TMC government can deliver on its ambitious promises amidst increasing financial pressure will be closely watched not only by voters but also by creditors and financial institutions monitoring Bengal’s economic health.
Disclaimer : This story is auto aggregated by a computer programme and has not been created or edited by DOWNTHENEWS. Publisher: ZEE News
